by Mike Colpitts 
The Florida condo market has been rocked by the condo crash following the Surfside condo collapse four years ago.
- Investigators revealed that the cause of the crash was the old pool deck that was never built up to code.
- The Surfside collapse triggered the need for new legislation to protect the public.
As investigators revealed that cracks in the pool deck of the Surfside condo complex triggered the buildings collapse near Miami four years ago, the South Florida condo market is being rocked by the condo crash.
The Surfside collapse triggered the need for much needed inspections of aging condo infrastructure, which had not been maintained over the years. New state legislation has slowed the process forced upon older condo developments to update their aging buildings.
The condo crash in Southwest Florida is slowly unfolding as rising construction costs for improvements, higher homeowner insurance costs and an over supply of condo units listed for sale slow the market. Only 222 condo units sold in the Fort Myers area during all of August, accounting for one of the slowest months of condominium sales on record.
Florida Rocked by Condo Crash
The slowdown has also resulted in the biggest buyers market in the region’s history for potential condo buyers who are able to find condo prices at the lowest levels in more than a decade. Declining buyer interest coupled with higher mortgage rates are exerting downward pressure on prices.
The pack mentality of a booming real estate market produces more home and condo sales but does not necessarily produce high prices for home and condo owners once they do eventually sell their properties.
The best opportunities for buyers are in Fort Myers and Cape Coral, where prices have dropped so much that buyers are starting to take notice. The turmoil the Surfside collapse has triggered is statewide in the condo market but some buildings in Fort Myers are selling at bargain basement prices.
The long term risk of making a purchase in this market can be a real life issue but newer condo buildings that won’t need huge costly new construction upgrades are also being discounted as a result of the fallout. The downside protection can at least be partially protected with a purchase of a newer unit.
Condo Owners Flee as Condo Market Rocked
Many condo owners afraid of the fallout are scrambling to sell and dropping the prices on their condo units drastically, triggering a flood of condo units on the market. Isolated examples include a rare unit priced to sell as low as $9,000–$10,000.
The decline has triggered headlines in the mass media that makes it seem like almost all of the condo units listed for sale are slashing their prices to record lows. But the bottom of the market isn’t falling out in Southwest Florida, where prices are still declining but not at such a dramatic rate.
Homeowner insurance costs soared following the Surfside collapse and then again after Hurricane Ian but have since been reduced by homeowners insurance companies. The trend is seeing homeowner insurance rates declining and industry veterans expect the decline on the premiums to continue to improve.
Yet even as prices fall on many condo units, the abundance of opportunity makes the market a huge attraction for those shopping for a deal.